Facebook hit with fresh IPO-related lawsuit
(REUTERS) - A Facebook Inc shareholder filed a lawsuit over the largest social networking company's botched initial public offering (IPO) and is seeking to hold chief executive Mark Zuckerberg, directors and officers responsible for the damage.
The lawsuit by Ms Gaye Jones alleges that the company's directors knew that Facebook did not disclose weaker revenue trends as more users accessed the website through mobile devices. The complaint alleges that information had been selectively shared with the company's IPO underwriters and key investors.
The lawsuit seeks to force the directors and other defendants to disgorge the money they made from selling stock through the IPO, which they allegedly knew was overpriced.
"The defendants were unjustly enriched because they realised enormous profits and financial benefits from the IPO, despite knowing that reduced revenue and earnings forecasts for the company had not been publicly disclosed to investors," said the complaint.